Think long term once you wanna start a business in Argentina!

The Argentinian-German Chamber of Commerce – I was very pleased about the fact that el Senior Federico Thielemann – Director Comercio Exterior y Sustentabilidad (foreign trade and sustainability) welcomed me in the 23^rd level in the heart of Buenos Aires' Downtown area. After a short introduction about the background of our whole project he started to present a comprehensive overview about the Argentinian economy, the public affairs which companies need to handle if they are interested in setting up business in or with Argentina.

General Country Overview

Argentina is more or less a stable region without any bigger conflicts which might interfere business opportunities in any way. The whole so called MERCOSUR region (Mercado Común del Sur )is democratic. But Argentina is facing a rising criminality as well as any other country in South America – esp. in bigger cities like Buenos Aires.

The gaming rules for legal and business regulations are changing constantly and with short public announcement beforehand.

SAP in Brazil: We make the world run better !

As fate will sometimes have it I met in Buenos Aires a very nice Business Development Manager of SAP Brazil. Boris Göbel is from Germany and was delegated to Sao Paolo since the beginning of the year.

Apart from all other interesting information he presented - I lost words as I heard what kind of message he got as he introduced himself in Brazil to many local employees. „Oh Germany... I would love to travel once over there, because you can have such a cheap holiday there“ I mean honestly – is this something you are expecting if someone who considers Germany as one of his next travel destinations? For sure not...

Company / Market definition:

Let's switch over to the business part of this story.

SAP entered the Brazilian market 15 years ago. Since then, SAP’s business in Brazil grew constantly, even making Brazil SAP’s third biggest country in terms of revenue in 2010. SAP sees enormous growth rated in many geographies, but the speed of growth in Brazil is unparalleled. 

Some more impressions .. this time without too many words around

As you can imagine South America is made for communication :-) Whereever you are people are talking, smiling, laughing, shouting, dancing and so it might not surprise that Facebook is a big topic here as well. I personally was a bit surprised as I saw that the city Buenos Aires mainly publishs their Facebook-Links instead of the normal city website. The facebook and twitter icon is integrated on many company advertisement just to make sure that people get connected to them. I really had to laugh as I saw the Facebook shirt with a short explanation around this whole topic. This was finally convincing me: Facebook matters here a lot!

Sixt Car rental in Argentina follows a strategy of stable and healthy growth!

As you can imagine I was pretty excited to speak to el Senior Juan José Craviotto. He was my first interview partner so I prepared a lot of questions and overview information beforehand.

We were sitting in a lovely Argentinian cafè not far away from the Sixt office and I got the chance to get a comprehensive overview of running a business in Argentina as well as more specific information about the car rental industry. Argentina is a country which is facing ongoing changes. Within a short period the government, the currency and the dependencies between companies and citizens can change completely. Therefore companies take a big risk in setting their business up.

Company / Branch specific information:

Sixt started with a franchise system in Argentina in 2006. The argentinian family owned company is Transportes Furlong, which has been in business for the last 50 years, although the Furlong name is related to transportation business for almost 100 years in Argentina. 

In 2006 Sixt Argentina started with a fleet of 25 cars and have constantly expanded to the present 200 cars. The main strategy of Sixt in Argentina is:

1. To rent their own cars locally;
2. To sell Sixt rentals from Argentina at a reasonable price throughout the Sixt network.

Market definition:

Compared to some other companies within Argentina the car rental business from Sixt is not that big so far. AVIS as industry leader acts with a fleet of 1200. Local competitors are: Dietrich (aprox. 200 cars), Auto Corp (aprox. 250 cars), Utility (aprox. 600 cars). 40% of the current Sixt Argentina revenue is made by corporate business. 60% comes from mainly European travellers and local people.

Website usage:

The biggest booking channel for both segments is still mainly by phone call / email / 'walk in' with 67% of all reservations. 26% of all bookings come via internet mainly by European travellers. But the number of reservations via the internet is constantly growing particularly during the last couple of months. Half of the customers are paying with credit cards already.

Internet spread / future steps:

Sixt Argentina collected during the last 1 1/2 years a lot of experience in search engine marketing. With the help of a local agency they reached a good level in terms of impressions and click prices.E-commerce is focused within the ads. The conversion rate is still a key task for improvement. Therefore in the future there will be far more stronger collaboration with the Sixt headquarters and their service providers.

Search engine optimization, an Argentinian operated Facebook fan page, cooperation with hotels and travel agencies or any other customer relationship oriented online activities are still not a big issue for Juan. Offline marketing activities are mainly related to regular press releases and ads in magazines. As the fleet has to grow constantly in a difficult surrounding and resources are limited they need to focus on the main tasks to continue running the business in a profitable way.

As with the majority of companies in today's world, online marketing is part of the overall company strategy here in Argentina, however at present it is not run with maximum power behind due to other important business tasks.

I'll keep my fingers crossed that Juan & his team are succeeding on the taken path.

@Juan: Quisiera agradecerle por la entrevista interesante!

How are you setting up an interview guideline in a smart way?

As the blog itself gets more and more international attention as well it might be a good idea to switch to English. Therefore from now on I will mainly post in English to give also the companies I am talking to the chance to read and understand what I am publishing about their interviews and the online market research in general I am trying to set up here in South America.
I already gave notice about the upcoming Sixt Interview which took place last Friday finally.The results of this very interesting and informative meeting will be published shortly here on this side. Be curious about!

As described last week already the main targets are to find out how the internet inflcuences

• the company itself in a way of communicating, positioning and selling their products/services via the online channel
• the customers expectation to use/ get these products/services via the online channel 
• on the other hand also the dialog between customers and company regarding satisfaction, claims, contact points and so on.

No matter what size, branch or products a company offers the interview guidelines will all be set up in a similar pattern to even offer the possibility to compare them with eachother somehow.
I am going to focus on the following pattern. If you have any more questions or any good advices around I am happy to get some feedback from you!

• Company- / branch specific background (organisational structure, company size, overall strategy etc.)
• Online Market-definition (target groups, competitors, differentiation)
• Website conception itself (overall target - brand / e-commerce, e-commerce offer and services around, user experience, website structure etc.)
• Internet-Spread (Search engine marketing, Search-engine-optimization, social networks, online cooperations, additional services)
• Business development / Future expectations

In each section I prepared a couple of specific questions regarding the individual category topics.
What I might plan to do additoinally to all these interviews is to post some kind of ads which are crossing my way by coincidence. This can be just "normal" offline posters which have an interesting content or local way of communicating something which at least puts a smile on your face at the end. I am collecting pictures of these situation and will integrate them approximately within this blog once a week.

Last but not least I like to give you also a bit of a perspective what else is waiting in the queue to get published next to the Sixt interview. By coincidence I got in contact with a business development manager who is working for SAP in Brazil. Even I am not travelling to Brazil the information around the whole development there was more than faszinating and will be summarized as well during the next couple of days...

For now I can only say.. next update is coming soon.